Data Sheet—China and U.S. in a Dead Heat for A.I.

Jane Sun, CEO of Ctrip, the Chinese online travel site, says “talent follows opportunity.” She’s referring in part to her own fortunate journey. She was a finance executive in Silicon Valley in the 1990s at the semiconductor manufacturing company Applied Materials. When her husband was offered a job as an early employee of Alibaba they returned to their native China, where she joined the company she now leads. It’s worth $16 billion and has ambitions to be global, beyond its role today serving Chinese travelers at home and abroad.

Sun’s career timing has been impeccable. It also mirrors the rise of the Chinese technology phenomenon. After spending two days meeting entrepreneurs and executives at some of China’s most dynamic companies—and also Westerners still eager to cash in on China’s growth—I’m persuaded that for all the obstacles this story isn’t over.

On a panel Friday morning at the Fortune Global Tech Forum in Guangzhou the chief technology officer of Ant Financial, Alan Qi, spoke about how the Alibaba-affiliate is using artificial intelligence to improve the efficiency of insurance adjusters. Jim Breyer, the veteran Silicon Valley venture capitalist, thinks eight out of the 18 most valuable companies ten years from now will be Chinese A.I. outfits. His business partner, IDG Capital’s Hugo Shong thinks 10 of the 18 will be Chinese. They agree the balance will be American.

The Chinese are having positive impacts in unexpected ways. George Yip, the British business school professor and scholar of Chinese business, has done case studies on how Haier’s investments in GE’s appliance business and Geely’s investments in Volvo helped revive neglected brands. Chinese startups are upending the education market too. Cindy Mi, founder of VIPKid, says the most popular location of her firm’s online English teachers is Texas. Entrepreneur Yi Wang runs LAIX, a company that is teaching English to adults with an A.I.-driven personalized “virtual teacher.”

Despite trade tensions, despite language barriers, despite China being all but closed to U.S. Internet giants, so much opportunity remains. The talent will surely continue to follow.

NEWSWORTHY

Sandberg vs. Soros: Facebook COO Sheryl Sandberg is under scrutiny yet again, this time over revelations she asked for an investigation into whether George Soros was shorting the company’s stock. The news undercuts earlier claims Sandberg didn’t know about a lobby campaign to attack the billionaire.

You can check out—but you can never leave: Marriott International is the latest to suffer a catastrophic data breach. The hotel chain disclosed hackers exploited its Starwood reservation system to obtain personal details—including passport numbers and birthdates—of hundreds of millions of customers.

Blockchain blossoms in China: The recent cryptocurrency wipeout hasn’t dimmed hopes for blockchain technology in China. The CEO of Xunlei Technology, a blockchain pioneer, boasted that his company’s Thunder Chain can process one million transactions per second.

Trump warms to Big Tech: In a sign of rapprochement between the White House and Silicon Valley, President Trump has invited the CEOs of Google, Microsoft, and other firms to discuss U.S. tech leadership next Thursday. Topics will reportedly included A.I., 5G, and quantum computing.

Questions abound for China’s NASDAQ: President Xi recently announced plans for a new stock exchange that would give tech firms access to Chinese investors. The idea holds a lot of appeal but details remain scant on how it will all work. Some leading Chinese executives, speaking at Fortune‘s Global Tech Forum, shed some light on what we know so far.

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FOOD FOR THOUGHT

Are you an iPhone user who feels the App Store isn’t what it used to be? I certainly am. And now I know why. In a cri-de-coeur essay, long-time app developer David Barnard calls on Apple to curtail the sketchy tricks—from keyword manipulation to abusive sign-up practices—app builders use to game the Store.

[A]s the financial incentive to build and maintain great niche apps dries up, the beautiful and diverse forest of apps that is the App Store will slowly start to look more like the unkempt Play Store […]

Cumulatively, the apps using these tactics are creating billions of terrible experiences for iOS users. But it’s not just that, they are choking out the developers who care about building great experiences and respecting users. By employing these tactics, apps are far more profitable and can afford to pay more to acquire users. Which makes it really tough for apps not employing these tactics to compete in acquiring users. And by gaming App Store search, these apps make it nearly impossible for conscientious developers to get organic search traffic on high volume keywords.

BEFORE YOU GO

Tall latté hold the porn: Starbucks has long had a policy barring use of its Wi-Fi networks to watch porn, but has not taken any technological measures to enforce it. That’s set to change following pressure from Enough Is Enough, an anti-pornography advocacy group, which pointed out Starbucks has for years filtered porn in the U.K. and called on the company to do the same in the U.S.